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Still Seeking A Bottom

Stocks printed their lowest point on Monday.

Monday was day 33 for the daily equity cycle, placing stocks in their timing band for a DCL. While stocks did form a swing low on Wednesday, they remain contained by the 200 day MA. With the 10 day MA converging on the 200 day MA, we will need to see a close above both the 200 day MA and the 10 day MA to signal a new daily cycle.  

Gold Uptrend

Gold is demonstrating a bullish change in behavior.

Prior to printing the late December DCL, gold was in a pattern of printing lows below the lower daily cycle band. That is characteristic of a daily downtrend. Since the late December low that pattern has changed. Gold is now forming highs above the upper daily cycle band and lows are now forming above the lower daily cycle band. This is characteristic of gold being in a daily uptrend. Gold will remain in its daily uptrend unless it closes below the lower daily cycle band.

The Sky Is Falling

Stocks closed below the previous DCL on Thursday to form a failed daily cycle. 

Stocks continued lower on Friday to close below the 200 day MA. Friday was day 32, placing stocks in their timing band for a DCL. A swing low and recovery of the 200 day MA would signal a new daily cycle. Stocks are currently in a daily downtrend. They will remain in their daily downtrend unless they close back above the upper daily cycle band.

In the Weekend Report I discuss how the failed daily cycle impacts the status of the intermediate cycle as well as the status of the yearly cycle.

Bearish Behavior

Stocks continued lower on Tuesday.

Stocks broke below the day 24 low on Tuesday to extend the daily cycle decline. Stocks also closed below the lower daily cycle band on Tuesday. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. Closing below the lower daily cycle band also indicates that the intermediate cycle decline has begun. A break below the previous daily cycle low of 4495.12 will form a failed daily cycle, confirming the intermediate cycle decline.

Miner Volatility

The status of the daily Miners cycle is not clear. Closing above the 50 day MA and the upper daily cycle band on Wednesday indicates the day 16 hosted an early DCL. But then the Miners lost the 50 day MA on Thursday and formed a swing high on Friday.

A close below the 10 day MA will signal a continuation of the daily cycle decline. However, the Miners formed a bullish reversal off the 10 day MA on Friday. The Miners are currently in daily uptrend. If they form a swing low and close back above the 50 day MA then they will remain in their daily uptrend and trigger a cycle band buy signal. If this occurs then we will label day 16 as an early DCL.  

Bearish Reversal

Forming a swing low and closing back above the 50 day MA on Tuesday looked, in real time, as if day 24 hosted an early DCL. That was negated on Thursday.

Stocks were rejected by the declining 10 day MA and formed a lower swing high on Thursday to close below the 50 day MA. This sets up the declining trend line and indicates a continuation of the daily cycle decline — which makes Thursday, day 27.

With price below the 10 week MA and the 10 week MA beginning to turn lower, this can turn into an intermediate cycle decline and the long over due yearly cycle decline, which I plan to discuss in the Weekend Report.

Swing Low

Stocks formed a swing low on Tuesday.

Stocks printed their lowest point on Monday, day 24, which is a bit early to expect a DCL to form. But as we discussed on Monday, stocks have otherwise satisfied the criteria for a DCL. And with stocks being in a daily uptrend, forming a swing low and closing above the 50 day MA indicates a continuation of the daily uptrend and triggers a cycle band buy signal. Therefore we will label day 24 as the DCL. Stocks should go on to break above the 10 day MA and turn it higher as they rally out of their DCL.

Daily Cycle Low?

Stocks formed a bullish reversal on Monday.

Monday was day 24 for the daily equity cycle, which is a bit early to expect a DCL to form. However, stocks closed below the 10 day MA turning it lower, closed below the 50 day MA, and retraced well past the 61% fib level. If stocks form a swing low and close back above the 50 day MA then we will label day 24 as an early DCL. Stocks have been in a daily uptrend. If they form a swing low above the lower daily cycle band then stocks will remain in their daily uptrend and trigger a cycle band buy signal. A break above 4673.02 will form a daily swing low.